CH.7

C) is more appealing when the country-to-country differences in buyer tastes, cultural traditions, and market conditions are diverse.

91) A "think-local, act-local" multidomestic type of strategy A) is very risky, given fluctuating exchange rates and the propensity of foreign governments to impose tariffs on imported goods. B) is usually defeated by a "think-global, act-global" type of strategy. C) is more appealing when the country-to-country differences in buyer tastes, cultural traditions, and market conditions are diverse. D) is generally an inferior strategy when one or more foreign competitors are pursuing a global low-cost strategy. E) can defeat a global strategy if the "think-local, act-local" multicountry strategist concentrates its efforts exclusively in those foreign markets that have superior resources.

A) matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country.

92) The strength of a "think-local, act-local" multidomestic strategy is that it A) matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country. B) employs strategies that are almost totally different from and also unrelated to its strategies in other countries. C) operates independent plants, located in different countries, thus promoting greater achievement of scale economies. D) avoids host country ownership requirements and import quotas. E) eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

E) large demands to pursue conflicting objectives simultaneously.

93) A "think-local, act-local" multidomestic strategy works particularly well in all of the following situations, except when there are A) regulations enacted by the host governments requiring that products sold locally meet strictly defined manufacturing specifications or performance standards. B) significant country-to-country differences in customer preferences and buying habits. C) diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country-to-country. D) significant country-to-country differences in distribution channels and marketing methods. E) large demands to pursue conflicting objectives simultaneously.

B) giving local managers considerable strategy-making latitude and often producing different product versions for different countries.

94) A "think-local, act-local" multidomestic strategy entails A) offering a narrow product line aimed at serving buyers in the same segments of country markets worldwide. B) giving local managers considerable strategy-making latitude and often producing different product versions for different countries. C) adopting aggressive efforts to locate facilities in those country markets that have superior resources. D) pursuing strong product differentiation and competing in many buyer segments. E) extensive efforts to transfer a company's competencies and resource strengths from one country to another so as to keep entry costs into new country markets low.

A) a company desires to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide.

95) Employing a "think-local, act-local" multidomestic strategy is highly questionable when A) a company desires to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide. B) there are significant country-to-country differences in customer preferences and buying habits and the industry is characterized by big economies of scale and strong experience curve effects. C) the trade restrictions of host governments are diverse and complicated. D) there are significant country-to-country differences in distribution channels and marketing methods. E) host governments enact regulations requiring that products sold locally meet strictly defined manufacturing specifications or performance standards.

D) It hinders the transfer of a company's competencies and resources across country boundaries and hinders the pursuit of a single, uniform competitive advantage in all country markets where a company operates.

96) What is a primary drawback of a localized multidomestic strategy? A) It hinders the use of cross-border coordination of a company's activities and increases a company's vulnerability to adverse shifts in currency exchange rates. B) It makes it very difficult to take into account significant country-to-country differences in distribution channels and marketing methods. C) It makes it difficult and costly to be responsive to country-to-country differences in customer needs, buying habits, cultural traditions, and market conditions. D) It hinders the transfer of a company's competencies and resources across country boundaries and hinders the pursuit of a single, uniform competitive advantage in all country markets where a company operates. E) It is unsuitable for competing in the markets of emerging countries and posing added difficulty in modifying a company's business model to compete on the basis of low price.

B) the markets in various countries to be part of the world market and competitive conditions across country markets to be strongly linked.

97) A global strategy allows for A) the leading companies to compete for the biggest share of the world market, but only occasionally compete head-to-head in different countries. B) the markets in various countries to be part of the world market and competitive conditions across country markets to be strongly linked. C) a company's overall market strength to be the sum of its market shares in each country market where it has a presence. D) the industry leaders to be foreign companies, while domestic companies are relegated to runner-up status. E) a firm's overall competitive advantage to be determined by the size of the competitive advantage it has in each of its profit sanctuaries.

E) uses local brand names to cater to a country's specific needs.

98) A global strategy is one in which a company performs all of the following tasks, except it A) employs the same basic competitive approach in all countries where it operates. B) sells much of the same products everywhere. C) strives to build global brands. D) coordinates its actions worldwide with strong headquarters control that represents a think-global, act-global approach. E) uses local brand names to cater to a country's specific needs.

C) building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another.

99) A think-global, act-global strategic theme puts emphasis on A) executing a global domination strategy that focuses the company's resource strengths on entry strategies across all country boundaries. B) ensuring that value chain activities are defined by country-specific attributes to capitalize on economies of scale. C) building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another. D) elevating resources and capabilities developed on a country-by-country basis so as to capitalize on a country's uniqueness. E) implementing mass-customization techniques that can address local preferences efficiently.

B) Resources and best practices should be shared, value chain activities should be integrated, and capabilities should be transferred from one location to another as they are developed.

100) What is the best way to achieve the efficiency potential of a global strategy? A) Managerial attention should be focused on objective-setting, specifically oriented toward production practices. B) Resources and best practices should be shared, value chain activities should be integrated, and capabilities should be transferred from one location to another as they are developed. C) The best identified resources and capabilities should be centralized at headquarters. D) Value chain activities must be dispersed across many countries to elevate cost control management as a primary focus in all countries. E) Local managers should be given considerable latitude for executing strategies for the country markets they are responsible for.

B) A "think-global, act-local approach."

101) Four Seasons Hotels uses which strategy to compete globally? A) A "think-local, act-local approach." B) A "think-global, act-local approach." C) A "think-global, act-global approach." D) A "think-local, act-global approach." E) An "emerging market, profit sanctuary approach."

D) a global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide, whereas a multidomestic strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries.

102) When comparing and contrasting the differences between a localized multidomestic strategy and a global strategy you would not say that A) a global strategy entails extensive strategy coordination across countries and a multidomestic strategy entails little or no strategy coordination across countries. B) a global strategy often entails use of the best suppliers from anywhere in the world, whereas a multidomestic strategy may entail fairly extensive use of local suppliers (especially where use of local sources is required by host governments). C) a global strategy tends to involve use of similar distribution and marketing approaches worldwide, whereas a multidomestic strategy often entails adapting distribution and marketing to local customs and the culture of each country. D) a global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide, whereas a multidomestic strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries. E) a global strategy relies upon the same technologies, competencies, and capabilities worldwide, whereas a multidomestic strategy often entails the use of somewhat different technologies, competencies, and capabilities as may be needed to accommodate local buyer tastes, cultural traditions, and market conditions.

B) striking the right balance between thinking globally and acting locally, even though it is more costly and complex to implement.

103) The marker of a true transnational strategy is A) a big majority of the company's rivals are pursuing localized multidomestic strategies. B) striking the right balance between thinking globally and acting locally, even though it is more costly and complex to implement. C) host governments enact regulations requiring that products sold locally meet strict manufacturing specifications or performance standards. D) plants need to be scattered across many countries to avoid high shipping costs. E) market growth rates vary considerably from country to country.

C) pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.

104) The approach of a firm using a "think-global, act-local" version of a transnational strategy entails A) producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country. B) having little or no strategy coordination across countries. C) pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions. D) selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so buyers in each country market will think they are buying a locally made brand. E) selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country), but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market.

C) the "think-global, act-global" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions.

105) The essential difference between a "think-global, act-global" and a "think-global, act- local" approach to strategy-making is that A) a "think-global, act-global" approach entails extensive strategy coordination across countries and a "think-global, act-local" approach entails little or no strategy coordination across countries. B) the former aims at implementing the same business model worldwide, whereas the latter aims at implementing customized business models to better match local market circumstances. C) the "think-global, act-global" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions. D) a "think-global, act-global" approach involves selling a mostly standardized product worldwide, whereas a "think-global, act-global" approach entails selling products that are highly differentiated from country to country. E) a "think-global, act-global" approach involves selling under a single brand name worldwide, whereas a "think-global, act-local" approach entails utilizing multiple brands (typically one for each different country or group of neighboring countries).

D) involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise.

106) A primary drawback of a global strategy is that it A) allows firms to address local needs as precisely as locally based rivals can. B) permits firms to be more responsive to changes in local market conditions, either in the form of new opportunities or competitive threats. C) provides for lower transportation costs and also may involve higher tariffs. D) involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise. E) raises production costs due to the greater variety of designs and components.

E) glocalization

107) A transnational strategy is sometimes referred to as a __________ strategy. A) cross-border integrated B) synergistic global C) think-global, act-global D) think-local, act-local E) glocalization

C) is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner.

108) Companies often implement a transnational strategy because it A) combines flexible coordination with the pursuit of conflicting objectives simultaneously. B) provides an easy mode of operating to transfer and share resources and capabilities across borders. C) is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner. D) is the least complex and easiest to implement of all the strategy choices. E) is capable of achieving an efficiency potential through centralized decision making and strong headquarters control.

B) pursuing the same basic competitive strategy theme (low-cost, differentiation, best- cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.

109) The transnational approach of a firm using a "think-global, act-local" version of a global strategy entails A) selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country) but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market. B) pursuing the same basic competitive strategy theme (low-cost, differentiation, best- cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions. C) selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so that buyers in each country market will think they are buying a locally made brand. D) producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country. E) little or no strategy coordination across countries.

A) a transnational strategy

110) What strategy is considered more conducive to transferring and leveraging subsidiary skills and capabilities across borders? A) a transnational strategy B) an international strategy C) a think-local, act-global strategy D) a cross-border integrated strategy E) a standardized integrated strategy

D) locating value chain activities in whatever nations prove most advantageous in a manner that uses location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination.

111) Companies that compete internationally can pursue competitive advantage in world markets (or offset domestic disadvantages) by A) using a differentiation-based competitive strategy in those country markets with superior resources. B) choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices), thus keeping costs and prices lower than rivals. C) using an export strategy to circumvent the risks of adverse exchange rate fluctuations. D) locating value chain activities in whatever nations prove most advantageous in a manner that uses location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination. E) employing a multidomestic strategy instead of a global strategy.

D) in order to benefit from Germany's superior technological resources and allow greater oversight from company headquarters, also located in Germany

112) Adidas located its first robotic "speedfactory" in Germany to accomplish which objective? A) to build a state-of-the-art facility in order to fully capture scale economies via an export strategy B) to use export, licensing, or franchising strategies so as to minimize risk and capital investment C) to locate buyer-related activities in all countries where it sells its product D) in order to benefit from Germany's superior technological resources and allow greater oversight from company headquarters, also located in Germany E) to disperse its primary activities among various countries in a manner that lowered costs or helped to achieve greater product differentiation in foreign markets

C) consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities.

113) To use location to build competitive advantage, a company that operates transnationally or globally must A) employ either an export strategy or a franchising strategy. B) scatter its production plants across many countries in different parts of the world so as to minimize transportation costs. C) consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities. D) locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs. E) concentrate all of its value chain activities in the one country that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

E) the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

114) In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations in all of these situations, except when A) there are significant scale economies in performing an activity. B) the costs of manufacturing or other activities are significantly lower in some geographic locations than in others. C) when there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations). D) certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. E) the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

B) learning-curve effects

115) When concentrating production in a few locations, which of the following can allow a manufacturer to lower unit costs, boost quality, or master a new technology more quickly? A) significant scale economies B) learning-curve effects C) superior resources D) profit sanctuaries E) supporting industries

E) if resources retain their foreign contexts so there is competitive advantage over a broader domain.

116) Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous in all of the following situations, except A) when high transportation costs make it expensive to operate from central locations. B) whenever buyer-related activities are best performed in locations close to buyers. C) if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations. D) when it is desirable to hedge against (1) the risks of fluctuating exchange rates, (2) supply interruptions, or (3) adverse political developments. E) if resources retain their foreign contexts so there is competitive advantage over a broader domain.

E) centralizing value chain activities to foster just-in-time inventory activities.

117) The competitive advantage opportunities that a global competitor can gain by dispersing performance of its activities across many nations include all of the following, except A) being able to shift production from one country to another to take advantage of exchange rate fluctuations, differing wage rates, differing energy costs, or differing trade restrictions. B) being in a better position to choose where and how to challenge rivals. C) shortening delivery times to customers by having geographically scattered distribution facilities. D) locating buyer-related activities (such as sales, advertising, after-sale service and technical assistance) close to buyers. E) centralizing value chain activities to foster just-in-time inventory activities.

E) there are reasons to decouple buyer-related activities in favor of locational advantages.

118) Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous, except when A) buyer-related activities (such as sales, advertising, after-sale service, and technical assistance) need to take place close to buyers. B) buyers' demand for short delivery times and/or high transportation costs make it uneconomical to operate from one or just a few locations. C) it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and adverse political developments. D) there are diseconomies of scale in trying to operate from a single location. E) there are reasons to decouple buyer-related activities in favor of locational advantages.

A) a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage.

119) Transferring core competencies and resource strengths from one country market to another is A) a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage. B) best accomplished with a multidomestic strategy as opposed to a global strategy. C) feasible only with a global strategy; it can't be done with a multidomestic strategy. D) unlikely to result in a competitive advantage. E) nearly always the easiest and most surefire way to build competitive advantage in trying to compete successfully in foreign markets.

A) high transportation costs, diseconomies of large size, and trade barriers make it too expensive to operate from a central location.

120) Dispersing activities to many locations is competitively advantageous when A) high transportation costs, diseconomies of large size, and trade barriers make it too expensive to operate from a central location. B) a multidomestic strategy is better than a global strategy. C) technical after-sale services are unimportant to buyers. D) achieving economies of scale and scope in materials procurement, parts manufacture, finished-goods assembly, technology research, and new product development can frequently be decoupled from buyer locations and performed wherever advantage lies. E) host governments offer less restrictive trade barriers and regulatory requirements to companies that conform to local business practices.

B) to benefit from coordinating activities across different countries' domains.

121) Companies that compete on an international basis have a competitive advantage over their purely domestic rivals A) to achieve a larger domestic interest by developing sufficient resource strengths and competitive capabilities for success. B) to benefit from coordinating activities across different countries' domains. C) solely for the benefit of their shareholders. D) that guarantees the generation of big profits, big returns on investment, and big cash surpluses after dividends are paid. E) to give full access to the proprietary technological expertise or other competitively valuable capabilities.

B) a dominating depth in some competitively valuable area.

122) Sharing and transferring resources and capabilities across borders may also contribute to the development of broader or deeper competencies and capabilities, thereby helping a company achieve A) control over its resource capabilities. B) a dominating depth in some competitively valuable area. C) an intensity of resource diversification. D) precision and compliance in resource agility and responsiveness. E) direct investments in foreign countries.

C) derives substantial profits because of its protected market position or unassailable competitive advantage.

123) Profit sanctuaries are country markets or geographic regions where a company A) can rank the competitive advantage opportunities in each industry. B) possesses good strategic fit with other businesses and identifies the value chain where this fit occurs. C) derives substantial profits because of its protected market position or unassailable competitive advantage. D) creates substantial investment strategies because it is losing competitive advantage over competitors. E) invests its dividends in expanding its foreign market presence.

B) international competitor usually has a profit sanctuary in its home market and may have other sanctuaries in countries where it has a strong position and market share.

124) Profit sanctuaries are found to differ by a company's strategy, such that a(n) A) domestic-only company has access to many profit sanctuary locations worldwide. B) international competitor usually has a profit sanctuary in its home market and may have other sanctuaries in countries where it has a strong position and market share. C) globally competitive company generally has a profit sanctuary outside its home market in countries where it is a market leader and enjoys a strong competitive position. D) transnational company has profit sanctuaries in every country where it operates. E) company competing in a few country markets has more profit sanctuaries.

A) cross-market subsidization

125) What supports competitive offensives in one market with resources and profits diverted from operations in another market? A) cross-market subsidization B) a foreign market strategy C) a domestic-only company D) a home market offensive E) a multidomestic company

E) sets countries' tariff rates

126) What does the World Trade Organization (WTO) not do primarily? A) promotes fair trade practices B) actively polices dumping C) deals with the rules of trade between nations D) helps producers, exporters, and importers conduct business E) sets countries' tariff rates

A) Dumping practices

127) __________ is when a company sells its goods in foreign markets at prices that are below the prices at which it normally sells in its home market or well below its full costs per unit. A) Dumping practices B) Price-clearing system C) Clearance sale D) Discounting practices E) Competitive advantage

D) It could initiate a deterrence effect that encourages mutual restraint in taking aggressive action against one another due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war.

128) What can happen when international rivals compete against one another in multiple- country markets? A) It could create attractive industries that would have otherwise badly deteriorated. B) It could produce a business lineup consisting of too many slow-growth, declining, low-margin, or competitively weak businesses. C) It could create a greater diversity in the types of value chain activities between each business. D) It could initiate a deterrence effect that encourages mutual restraint in taking aggressive action against one another due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war. E) It could increase shareholder interests by concentrating corporate resources on foreign business activities to contend for market leadership.

A) of emerging countries.

129) Companies aspiring for global market leadership have to prioritize competing in the markets A) of emerging countries. B) of advanced industrialized nations. C) where they do not possess a strong competitive disadvantage compared with the domestic market leaders. D) where business risks are lowest. E) where high barriers to entry and government regulations protect incumbent firms.

D) developing a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly.

130) Tailoring a strategy to fit the circumstances of emerging country markets does not typically involve A) competing on the basis of low price. B) modifying aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding). C) transforming the local market to better match the way the company does business elsewhere. D) developing a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly. E) avoiding those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances.

E) focusing on local markets whose circumstances will be most challenging to the company's business model.

131) When tailoring their strategy to fit circumstances of emerging country markets, viable strategic options companies should consider include all of the following, except A) trying to change the local market to better match the way the company does business elsewhere. B) being prepared to modify aspects of the company's business model to accommodate local circumstances. C) preparing to compete on the basis of low price. D) staying away from those emerging markets where it is impractical to modify the company's business model to accommodate local circumstances. E) focusing on local markets whose circumstances will be most challenging to the company's business model.

E) Dell entering China by deviating from its traditional Internet-based orders to orders over phone and fax.

132) Modification of a company's business model to accommodate the unique local circumstances of developing countries is best exemplified b A) Mahindra and Mahindra's number one ranking in J. D. Power Asia Pacific's annual new-vehicle overall quality category. B) Home Depot relying on its value propositions only in some developing countries. C) Unilever developing a low-cost detergent, named Wheel, for the Indian market. D) Japan's reputation for competitive strength in consumer electronics. E) Dell entering China by deviating from its traditional Internet-based orders to orders over phone and fax.

C) utilizing understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals.

133) The basic strategy options for local companies in competing against global challengers include A) best-cost provider and focused low-cost provider and low-cost leadership strategies. B) export strategies, licensing strategies, and cross-border transfer strategies. C) utilizing understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals. D) franchising strategies, multidomestic strategies keyed to product superiority, global low-cost leadership strategies, and cross-border coordination strategies. E) focused differentiation and broad differentiation strategies.

D) The company transferred company expertise to cross-border markets and initiated actions to contend on an international level.

134) Televisa, a Mexican media company, became the world's most prolific producer of Spanish-language soap operas owing to its expertise in Spanish culture and linguistics. Which of the following strategies did Televisa employ to defend against global giants? A) The company developed business models that exploit shortcomings in local distribution networks or infrastructure. B) It utilized keen understanding of local customer needs and preferences to create customized products or services. C) Televisa took advantage of aspects of the local workforce with which large international companies may be unfamiliar. D) The company transferred company expertise to cross-border markets and initiated actions to contend on an international level. E) It used acquisition and rapid-growth strategies to better defend against expansion- minded internationals.

A) using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments.

135) A viable strategy option for a local company when entering into competition with global challengers does not involve A) using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments. B) developing business models to exploit shortcomings in local distribution networks or infrastructures. C) taking advantage of low-cost labor and other competitively important local workforce qualities. D) transferring a company's expertise to cross-border markets and initiating actions to contend on a global scale. E) using acquisitions and rapid growth strategies to defend against expansion-minded multinationals.

D) Kellogg's introduction of single-serving premixed yogurt-and-cereal breakfast packs in Vietnam.

136) Tailoring a company's strategy to fit the sometimes unusual or challenging circumstances presented in developing-country markets is not exemplified by A) Suzuki's entry into India that triggered a quality revolution among Indian auto parts and automobile manufacturers, including Mahindra and Mahindra. B) Home Depot's withdrawal from China. C) Unilever's development of a Wheel, a low-cost detergent in a single-use package, for sale in India. D) Kellogg's introduction of single-serving premixed yogurt-and-cereal breakfast packs in Vietnam. E) McDonald's vegetable burgers in parts of Asia and price adjustments in countries with low levels of disposable income.

E) offer a way to test the value and viability of a cooperative arrangement with a foreign partner before making a more permanent commitment.

137) Tiffany and Zulema have asked you for advice about strategic partners in Canada and Mexico to launch a new food truck locator app. You explain to them that the major pitfalls associated with pursuing strategic alliances with foreign partners are not likely to include A) learning that a local partner's knowledge and expertise turns out to be less valuable than expected with respect to development and execution of mobile app-based businesses. B) overcoming language and cultural barriers and figuring out how to deal with diverse (or conflicting) operating practices. C) reaching mutually agreeable ways to deal with key issues or launching new initiatives fast enough to stay abreast of rapid advances in technology or shifting market conditions. D) discovering that a local partner has conflicting objectives and strategies, deep differences of opinion about how to proceed, or important differences in corporate values and ethical standards. E) offer a way to test the value and viability of a cooperative arrangement with a foreign partner before making a more permanent commitment.

D) growth-minded companies are racing to build stronger competitive positions in the markets of more countries.

26) The world economy is globalizing at an accelerated pace because A) countries previously open to foreign companies have closed their markets. B) countries that previously had market or mixed economies now embrace planned economies. C) information technology is exacerbating the importance of geographic distance. D) growth-minded companies are racing to build stronger competitive positions in the markets of more countries. E) countries opposed to market or mixed economies have erected more stringent trade barriers.

A) match its core competencies and capabilities with rival social media companies such as What'sApp and Facebook.

27) In 2018, Suelin Chen and Mark Zheng co-founded Cake, a free social media app that catalogs users' end-of-life wishes, instructions, and documents such as obituaries. Cake, based in Boston, makes money through strategic partnerships primarily with health care providers and will eventually add fee-based premium services in global markets. Cake has decided to expand outside its U.S. home market in order to A) match its core competencies and capabilities with rival social media companies such as What'sApp and Facebook. B) compete with global social media providers such as WeChat and TikTok. C) gain access to new customers for the company's products/services. D) achieve differentiation through economies of scale, experience, and increased purchasing power. E) identify newer and stronger resources and capabilities in its home market.

D) access diamonds that could be certified as "conflict-free" and not associated with unethical mining practices or the finding of military activities in Africa.

29) Tiffany & Co. opted to enter into the mining industry in Canada in order to A) build the profit sanctuary necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market. B) capitalize on company competencies and capabilities. C) gain access to new customers in new markets. D) access diamonds that could be certified as "conflict-free" and not associated with unethical mining practices or the finding of military activities in Africa. E) achieve lower costs and enhance the firm's competitiveness.

D) to gain access to low-cost inputs of production

30) ExxonMobil enters into a pact with Gazprom, the world's largest natural gas extractor, to set up a processing unit in Baku, Azerbaijan. Which of the following is most likely the reason for ExxonMobil to opt for this strategic alliance? A) to gain access to new customers B) to scale back its core competencies C) to restrict its factors of production D) to gain access to low-cost inputs of production E) to better compete with Gazprom

A) to capture economies of scale in product development, manufacturing, or marketing

31) Why do companies decide to enter a foreign market? A) to capture economies of scale in product development, manufacturing, or marketing B) to raise input costs through greater pooled purchasing power C) to decrease the rate at which they accumulate experience and move up the learning curve D) to concentrate risk within a broader base of countries, especially when sales are down in one area and the company can undermine sales elsewhere E) to exploit the natural resources found within its home market

D) rely on its one-country customer base for competitive advantage and on its global

32) By deploying capabilities across a larger international domain, a company like Honda can gain the experience needed to upgrade its capabilities to a higher performance standard in order to A) contribute to a guaranteed recipe for competitive success. B) support the resource buildup needed to achieve depth in a developing or protected market. C) challenge a weaker set of international competitors, enabling a company to rely on a more modest set of competitive capabilities. D) rely on its one-country customer base for competitive advantage and on its global

C) different government policies and economic conditions make the business climate

33) Crafting a strategy to compete in one or more foreign markets can be considered complex because A) factors that affect industry competitiveness are the same from country to country. B) of the potential for location-based advantages to conducting value chain activities in certain countries. C) different government policies and economic conditions make the business climate more favorable in some countries than in others. D) currency exchange rates among countries are generally fixed and rarely change. E) buyer tastes and preferences differ among countries and present a challenge for companies concerning. customizing versus standardizing their products and services.

D) the Oriental Land Company reaped the windfall because the partner who bore the risk was also likely to be the biggest beneficiary from any upside gain.

34) When Disney relied on licensing agreements with the Oriental Land Company to open its first foreign theme park, Tokyo Disneyland, A) Disney was able to meet the challenge of localizing its product offerings in Japan, leading to a low-cost advantage. B) Japanese consumer buying habits and demographics no longer posed a challenge for Disney. C) Disney no longer needed to contend with fluctuating exchange rates and country-to- country variations in host government restrictions and requirements. D) the Oriental Land Company reaped the windfall because the partner who bore the risk was also likely to be the biggest beneficiary from any upside gain. E) Disney, not the Oriental Land Company, reaped the windfall because of learning curve effects.

E) What are the disadvantages of allowing foreign competition?

35) The diamond framework is not likely to answer which of the following questions about competing on an international basis? A) Where will the foreign entrants come from? B) Which countries have the weakest foreign rivals? C) What are the attributes of a country's business environment? D) What location of value chain activities is most beneficial? E) What are the disadvantages of allowing foreign competition?

D) differing population sizes, cultures, income levels, infrastructure, and distribution networks among countries.

36) Market size and growth rates in different countries can be influenced positively or negatively by A) the ability of management to tailor a strategy to take into consideration differences among country markets. B) which countries have the weakest foreign rivals. C) competitive rivalry that is only moderate in some countries. D) differing population sizes, cultures, income levels, infrastructure, and distribution networks among countries. E) the large size of emerging markets such as Brazil, Russia, China, and India.

C) Latvia makes low-cost loans to U.S. vodka distillers to stimulate competition in its market.

37) Nikki, CEO of an aspiring multinational craft vodka company, is researching cross- country differences in demographic, cultural, and market conditions. She would not likely discover that A) Nike produces its own line of skate shoes. B) Keurig has acquired a large coffee farm in Costa Rica. C) Latvia makes low-cost loans to U.S. vodka distillers to stimulate competition in its market. D) Intel's silicon chips are identical across the world. E) McDonald's offers 100 percent beef-free products in its outlets in India.

D) evaluate a multidomestic strategy that considers the world market as a mostly homogeneous market.

38) You have been asked to consult with Sonic.net, a regional Internet Service Provider, about the advisability of competing abroad. Your assessment of the opportunities for Sonic.net to craft a strategy to compete in one or more countries in the world would not necessarily A) evaluate country-to-country differences in consumer buying habits and buyer tastes and preferences. B) evaluate country-to-country variations in host government restrictions and requirements and fluctuating exchange rates for the company's offerings in each different country market or whether to offer a mostly standardized product worldwide. C) evaluate which countries to locate company operations for maximum locational advantage, given country-to-country variations in wage rates, worker productivity, energy costs, tax rates, and the like. D) evaluate a multidomestic strategy that considers the world market as a mostly homogeneous market.

D) whether to offer a standardized product worldwide or a customized product offering in each different country market

39) One of the biggest strategic challenges to competing in the international arena includes A) how to leverage the opportunities arising from shifting exchange rates. B) how to charge the same price in all country markets. C) how to identify foreign firms licensed to produce and distribute the company's products. D) whether to offer a standardized product worldwide or a customized product offering in each different country market. E) whether to pursue a franchising strategy or a joint venture strategy.

D) franchising opportunities in India

40) What factor is not LIKELY responsible for Apple's decision to set up mobile phone manufacturing facilities in India? A) growth potential of India's emerging market B) global standardization of mobile phone technology C) potential location advantages in wages, inflation rates, and tax rates that reduce costs D) franchising opportunities in India E) comparatively lower exchange rate and political risks

D) the extent to which Chinese governmental policies affect the local business climate.

41) According to Michael E. Porter's Diamond of National Competitive Advantage, an important factor shaping Tesla's decision to manufacture EV in China is A) existing similarities among buyer tastes for a particular product or service across countries. B) the competitive pressures to increase differentiation. C) the stable exchange rates between the U.S. dollar and the Chinese yuan. D) the extent to which Chinese governmental policies affect the local business climate. E) the level of Chinese industry-related support activities to foster customization of products and services.

E) De Beers establishing greenfield operations in the mining region of South Africa.

42) A location-based advantage for competing on an international basis can best be exemplified by A) Microsemi Corporation acquiring California-based Actel Corporation. B) RBC Wealth Management closing operations in south Florida. C) Samsung diversifying and venturing into textiles and food processing. D) Hyundai signing a memorandum of understanding with the government of South Korea to halt exports. E) De Beers establishing greenfield operations in the mining region of South Africa.

E) reduced taxes, low-cost loans, and site-development assistance.

43) The Irish government's policies that make it more attractive for foreign companies to locate operations in that country include A) subsidies and low interest loans to domestic companies. B) stringent environmental compliance regulations. C) prior approval of capital spending projects. D) requirements such as partial ownership of foreign company operations by local companies or investors or that a certain percentage of the parts and components used in manufacturing a product be obtained from local suppliers. E) reduced taxes, low-cost loans, and site-development assistance.

B) knowledge sharing within same value chain system

44) Apollo Tires sets up a manufacturing unit in Mexico. Following this, Renault-Nissan signs a supply contract with the tire manufacturer. In which of the following ways is Renault- Nissan likely to gain from the pact? A) different styles of management, organization, and strategy B) knowledge sharing within same value chain system C) availability of natural resources at low cost D) growth potential and large size of the market E) government policies in the host country

C) Australia, which recently introduced a permanent employer-sponsored visa program for skilled manpower.

45) Gallo Wines is seeking international market entry. One if its top criteria for choosing a country to enter is a pro-business government policy. John would advise Gallo Wines to enter A) Argentina, which has increased its interest rate on loans to foreign entrants from 15 percent to 19 percent. B) Germany, since the European Union has imposed a 16 percent tariff on the import of agricultural produce. C) Australia, which recently introduced a permanent employer-sponsored visa program for skilled manpower. D) South Africa, which now levies a per metric ton carbon tax on electricity and a per liter surcharge on water. E) China, whose government favors partial local ownership of foreign-owned companies.

D) reduced taxes, low-cost loans, site location and site development assistance, and government-sponsored training for workers to encourage companies to construct production and distribution facilities.

46) A typical host government requirement that encourages the entry of foreign companies to establish operations in that country is A) imposing burdensome tax structures and regulatory requirements upon foreign companies doing business within their borders. B) placing restrictions on exports to ensure adequate local supplies. C) having rules and policies that protect local companies from foreign competition. D) reduced taxes, low-cost loans, site location and site development assistance, and government-sponsored training for workers to encourage companies to construct production and distribution facilities. E) establishing local content requirement on goods made inside their borders by foreign companies.

A) political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies.

47) The difference between political risks and economic risks is that A) political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies. B) political risks stem from stability in foreign business, while economic risks stem from an excess of property right protections. C) political risks stem from hostility to foreign currencies, while economic risks stem from the instability of the monetary system. D) political risks stem from exchange rate fluctuations, while economic risks stem from hostility to foreign business. E) political risks stem from the stability of a country's monetary system, while economic risks stem from instability in national business.

D) becomes more competitive in the United Kingdom when the U.S. dollar declines in value against the British pound.

48) A U.S. organic personal hygiene product manufacturer that exports toothpaste and deodorant made at its U.S. plants for shipment to the U.K. market A) is competitively disadvantaged when the U.S. dollar declines in value against the British pound. B) is largely unaffected by fluctuating exchange rates. It would, however, be affected if its plants were in the United Kingdom or other foreign countries. C) becomes more competitive in the United Kingdom when the U.S. dollar gains in value against the British pound. D) becomes more competitive in the United Kingdom when the U.S. dollar declines in value against the British pound. E) has no interest in whether the dollar grows stronger or weaker versus the British pound unless it is competing only against companies located in the United Kingdom.

C) becomes less competitive in the U.S. market when the euro rises in value against the U.S. dollar.

49) An Irish dairy producer that exports gourmet cheeses made at its Kerry plants to the United States A) is competitively disadvantaged when the euro declines in value against the U.S. dollar. B) is largely unaffected by fluctuating exchange rates between the euro and the U.S. dollar. It would, however, be affected if its plants were in the United States. C) becomes less competitive in the U.S. market when the euro rises in value against the U.S. dollar. D) becomes more competitive in European markets when the euro declines in value against the U.S. dollar. E) has no interest in whether the euro grows stronger or weaker versus the U.S. dollar unless its chief competitors are other companies located in countries whose currency is also the euro.

B) is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported.

50) A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets across the world A) is competitively disadvantaged when the U.S. dollar declines in value against the Brazilian real. B) is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C) becomes less competitive in foreign markets when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. D) is competitively advantaged when the U.S. dollar appreciates in value against the Brazilian real. E) is unaffected by changes in the valuation of foreign currencies against the Brazilian real—all that matters to a U.S. company is the valuation of the U.S. dollar against the Brazilian real.

C) becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported.

51) A European-based company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets in many different parts of the world A) is competitively disadvantaged when the euro declines in value against the Brazilian real. B) is competitively disadvantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C) becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported. D) is competitively advantaged when the euro appreciates in value against the Brazilian real. E) has no interest in whether the euro grows stronger or weaker versus the Brazilian real unless its chief competitors are other companies located in countries whose currency is also the euro.

B) A decline in the value of the ringgit against the euro reduces the cost of furniture manufactured in Malaysia, and makes it more competitive in European markets.

52) Why does a U.S. company exporting wooden furniture manufactured in Malaysia to the European Union benefit from the decline in the value of the ringgit against the euro? A) A decline in the value of the ringgit against the euro raises the cost of furniture manufactured in Malaysia, and makes it less competitive in European markets. B) A decline in the value of the ringgit against the euro reduces the cost of furniture manufactured in Malaysia, and makes it more competitive in European markets. C) A decline in the value of the ringgit against the euro has no impact on the cost of furniture manufactured in Malaysia, in both Malaysian or European markets. D) A decline in the value of the ringgit against the euro makes European goods more competitive, compared to Malaysian goods. E) A decline in the value of the ringgit against the euro makes Malaysian goods less competitive in the U.S. market.

D) are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.

53) The advantages of manufacturing goods in a particular country and exporting them to foreign markets A) are largely unaffected by fluctuating exchange rates. B) are greatest when local distributors and dealers in that country can be convinced not to carry products that are made outside the country's borders. C) can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold. D) are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E) are multiplied by the potential for local government officials to raise tariffs on the imports of foreign-made goods into their country.

B) avoid the effects of fluctuations in exchange rates on the costs of manufacturing goods in a particular country.

54) The 2015 merger of Walgreens Boots Alliance, one of the world's largest pharmaceutical purchasers, is not likely to A) reduce the significant risks of fluctuating exchange rates to its competitiveness in foreign markets. B) avoid the effects of fluctuations in exchange rates on the costs of manufacturing goods in a particular country. C) succeed when the currency of the country from which the goods are being exported grows weaker relative to the currencies of the countries that the goods are being exported to. D) see the advantages of manufacturing goods in a particular country erode when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E) come under pressure from lower-cost imports if local currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

D) always benefit domestic companies facing competitive pressure from lower-cost imports when their government's currency grows weaker.

55) The impact of fluctuating exchange rates on companies competing in foreign markets A) are easy to predict in spite of the variety of factors involved and the uncertainties surrounding when and by how much these factors will change. B) never change the pecking order consisting of which countries represent the low-cost manufacturing locations and which rivals have the upper hand in the marketplace. C) always disadvantage domestic companies facing competitive pressure from lower-cost imports when their government's currency grows weaker. D) always benefit domestic companies facing competitive pressure from lower-cost imports when their government's currency grows weaker. E) help domestic companies under pressure from lower-cost imports when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

A) are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.

56) The advantages of manufacturing goods in a particular country and exporting them to foreign markets A) are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. B) are greatest when local consumers prefer products manufactured inside the country's borders. C) are largely unaffected by fluctuating exchange rates. D) can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold. E) are largely unaffected by tariffs or quotas.

A) This is a true statement.

57) A weaker U.S. dollar is an economically favorable exchange-rate shift for manufacturing plants based in the United States. A) This is a true statement. B) No, the U.S. dollar must be stronger. C) Yes, because it provides for a weakened foreign demand for U.S.-made goods. D) Yes, because it makes such plants less cost-competitive with foreign plants. E) Yes, because it provides incentives of foreign companies to locate manufacturing facilities in the United States to make goods for U.S. consumers.

D) Pizza Hut, whose store layouts and menus are uniform in all its locations around the world.

58) Cross-country differences in demographic, cultural, and market conditions are not present for A) Fisher and Paykel, a company that produces energy-efficient, top-loading washing machines for sale in France. B) Starbucks, which has developed a new line of Vietnamese coffee drinks for sale in Southeast Asian markets. C) Ireland, a country that provides low-cost loans and tax havens to foreign entrants in order to stimulate capital investment. D) Pizza Hut, whose store layouts and menus are uniform in all its locations around the world. E) Ben & Jerry's Ice Cream, which produces kimchi-flavored ice cream for sale in South Korea.

C) Scotland provides low-cost loans to U.S. craft whisky distillers seeking entry to its markets in order to stimulate competitive rivalry.

59) Sara is researching cross-country differences in demographic, cultural, and market conditions. She would not likely discover that A) Nike produces its own line of skate shoes. B) Keurig has acquired a large coffee farm in Costa Rica. C) Scotland provides low-cost loans to U.S. craft whisky distillers seeking entry to its markets in order to stimulate competitive rivalry. D) Intel's silicon chips are identical across the world. E) McDonald's offers 100 percent beef-free products in its outlets in India.

E) whether to buy a struggling competitor at a bargain price or pay a premium to gain entry to the local market.

60) Companies operating in an international marketplace have to respond to all of the following, except A) whether to customize their offerings in each different country market to match the tastes and preferences of local buyers. B) whether to pursue a strategy of offering a mostly standardized product worldwide. C) how much to customize their offerings in each different country market to match the tastes and preferences of local buyers. D) the tensions between market pressures to localize a company's product offerings country by country and the competitive pressures to lower costs through greater product customization. E) whether to buy a struggling competitor at a bargain price or pay a premium to gain entry to the local market.

C) Maintain its U.S. production base and export products to Pacific Rim markets.

61) Imagine you are consulting Sonoma Brands, manufacturer and marketer of KRAVE artisanal beef jerky, about the company's strategic options for expansion into Pacific Rim markets. What mode of entry would you most likely recommend to Sonoma Brands? A) Rely on the Pacific Rim governments to restrict imports via raising tariffs and local content requirements. B) Establish a profit sanctuary in the Pacific Rim. C) Maintain its U.S. production base and export products to Pacific Rim markets. D) Agree to a significant level of local content in the manufacture of products. E) Sell the company to a competitor located in the Pacific Rim.

A) pursuing a profit sanctuary strategy.

62) Trader Joe's strategic options for expansion into foreign markets would not typically involve A) pursuing a profit sanctuary strategy. B) relying on cooperative agreements with foreign companies. C) employing a franchising strategy using local ownership. D) establishing a subsidiary via acquisition or greenfield development. E) exporting goods to foreign markets from a national base.

A) cross-border transfer activities and home country advantages.

63) Among the factors that do not determine whether to employ entry strategy options are A) cross-border transfer activities and home country advantages. B) the nature of the firm's objectives and trade barriers. C) whether the firm has a full range of resources and capabilities needed to operate abroad along with trade barriers. D) country-specific factors such as trade barriers and transaction costs, such as the cost of contracting with a partner and monitoring compliance with the terms of the contract. E) transaction costs, such as the cost of contracting with a partner and monitoring compliance with the terms of the contract.

A) excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets.

64) Using domestic plants as a production base for exporting goods to selected foreign country markets can be a(n) A) excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets. B) competitively successful strategy when a company is focusing on vacant market niches in each foreign country and does not have to compete head-to-head against strong host country competitors. C) powerful strategy since a company can maintain a one-country production base, allowing it to capitalize on company competencies and capabilities. D) weak strategy when competitors are pursuing multicountry strategies. E) powerful strategy because a company is not vulnerable to fluctuating exchange rates.

C) the United States, which is home to the world's three largest producers and suppliers of artificial heart valves.

65) Maya has chosen to research the export strategies of several global products. She would consider a good example of a DOMINANT export strategy to be A) the popular Harry Potter character Voldemort, which can only be leased or rented for use by amusement park operators. B) ZipCar, which allows taxi fleet operators to use its trademarks, services, and products for a fee. C) the United States, which is home to the world's three largest producers and suppliers of artificial heart valves. D) American Airlines' common stock, which is owned by AMR Corp., but is not available for public purchase. E) Facebook, which generates 51 percent of its advertising revenue outside the United States.

D) being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign markets.

66) The advantages of using a licensing strategy to participate in foreign markets include A) being especially well suited to achieve scale economies. B) being able to charge lower prices than rivals. C) being able to achieve first-mover advantages quickly and easily. D) being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign markets. E) being able to achieve higher product quality and better product performance than with an export strategy.

A) having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees.

67) The advantages of using a franchising strategy to pursue opportunities in foreign markets include A) having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees. B) being particularly well suited to the global expansion efforts of companies with multidomestic strategies. C) allowing a company to achieve scale economies. D) being well suited to companies who employ cross-border transfer strategies. E) being well suited to the global expansion efforts of manufacturers.

B) maintaining quality control due to a lack of commitment to consistency and standardization.

68) The big problem a franchisor faces is A) allowing franchisees to achieve scale economies. B) maintaining quality control due to a lack of commitment to consistency and standardization. C) eliminating the costs and risks associated with establishing a foreign business location. D) sharing foreign facilities and marketing strategies with local businesses. E) achieving higher product quality and better product performance than with an export strategy.

A) having a high level of control and speed as an entry strategy to overcome trade barriers.

69) The advantages of using an acquisition strategy to pursue opportunities in foreign markets include A) having a high level of control and speed as an entry strategy to overcome trade barriers. B) allowing a company to achieve scalable economies. C) eliminating the costs and risks associated with establishing a foreign business location. D) achieving variable product quality and competitive product performance. E) exporting goods at higher costs than rivals in those locations.

C) to pay a premium price for a successful local company or to buy a struggling firm at a discount price.

70) The big issue an acquisition-minded firm must consider is whether A) to acquire the firm at a price that cannot recapture the investment. B) to require the acquired firm's resources and management capability to sustain the ongoing struggling operation. C) to pay a premium price for a successful local company or to buy a struggling firm at a discount price. D) to pay a price that builds in all the synergistic advantages to the acquired firm. E) to pay a very high premium price that sends a signal to the market that the new firm has arrived.

A) where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up.

71) A greenfield venture in a foreign market is one A) where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up. B) where foreign facilities and marketing strategies are shared with local businesses. C) where the company learns through training by the foreign entity on how to compete. D) that supports exports into a foreign market by marketing indirectly through local rivals. E) that offers lower risk and a faster path to financial returns.

E) gaining access to local distribution networks, building supplier networks, and establishing working relationships with key government officials.

72) Acquisition of an existing firm rather than via internal development may be the least risky and cost-efficient means of overcoming entry barriers such as A) putting its own strategy into place. B) accelerating efforts to build a strong market presence. C) moving directly to the task of transferring resources and personnel, integrating and redirecting activities into its own operation. D) fast-tracking exports into a foreign market by marketing indirectly through local rivals. E) gaining access to local distribution networks, building supplier networks, and establishing working relationships with key government officials.

E) entering a new foreign country via internal development and building a foreign subsidiary from scratch, because it is cheaper than entering into strategic alliances and cooperative agreements.

73) When justifying her considerations for her China-based wine importation company's foreign market entry, Ming-Chi probably would not choose A) entering a new foreign country via internal development and building a foreign subsidiary from scratch when having scale economies to compete against local rivals. B) entering a new foreign country via internal development and building a foreign subsidiary from scratch by having the ability to gain increased access to distribution channels and networks. C) entering a new foreign country via internal development and building a foreign subsidiary from scratch adding new production capacity, because it will adversely impact the supply-demand balance in the local market. D) entering a new foreign country via internal development and building a foreign subsidiary from scratch, because it is cheaper than making an acquisition. E) entering a new foreign country via internal development and building a foreign subsidiary from scratch, because it is cheaper than entering into strategic alliances and cooperative agreements.

D) Such ventures are the fastest entry route to achieve a sizeable market share.

74) Greenfield ventures, like all market entry strategies, can pose serious problems to achieving foreign market entry success. What is not deemed a barrier to success? A) Such ventures can require costly capital investments. B) Such ventures can have a tendency to divert valuable resources from current business. C) Such ventures really need well-functioning strong markets. D) Such ventures are the fastest entry route to achieve a sizeable market share. E) Such ventures require legal protections of foreign investors.

D) has the necessary scale and resource strengths to compete with rivals.

75) Sandi is considering conditions that make an internal start-up strategy appealing over an acquisition and has determined that she would ONLY choose an internal start-up strategy when an internal start-up A) is more costly. B) affects the supply-demand balance by increasing production capacity. C) is unable to gain distribution access advantages. D) has the necessary scale and resource strengths to compete with rivals. E) lacks the experience in establishing new subsidiaries.

E) to create permanent arrangements between the domestic and foreign firms.

76) A major disadvantage of strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms is A) to compete on a more global scale while still preserving their independence. B) to gain better access to scale economies in production and/or marketing. C) to fill competitively important gaps in their technical expertise and/or knowledge of local markets. D) to share distribution facilities and dealer networks, thus mutually strengthening their access to buyers. E) to create permanent arrangements between the domestic and foreign firms.

D) Yum! Brands offered KFC franchises in China.

77) A cross-border alliance was not created when A) Walgreens merged with Alliance Boots in 2014. B) Hyundai Motor Company planned to open a new manufacturing plant in the Czech Republic. C) The insurance company Geico became a wholly owned subsidiary of Berkshire Hathaway. D) Renault-Nissan disclosed that it had sold more than one in ten cars worldwide. E) Carrefour, a French grocery chain, established a new wholly owned venture in Poland.

D) disengaging from the alliance once its purpose has been served.

79) An unlikely risk of cross-border alliances between domestic and foreign firms is A) overcoming language and cultural barriers. B) launching new initiatives to stay abreast of shifting market conditions. C) developing mutually agreeable ways of dealing with key issues or differences. D) disengaging from the alliance once its purpose has been served. E) becoming overly dependent on foreign partners for essential expertise.

E) potential for royalty from trustworthy firms.

80) The risks of strategic alliances often include all of the following except A) conflicting objectives and strategies. B) deep differences of opinion about how to proceed operationally and strategically. C) important differences in corporate values. D) misunderstandings about appropriate ethical standards. E) potential for royalty from trustworthy firms.

A) deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country

81) What is the foremost strategic issue that must be addressed by firms when operating in two or more foreign markets? A) deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country B) deciding on the appropriate level of sustainable profitability C) deciding on the relative cost competitiveness of the home country D) deciding on the degree of globalization to maintain expansion capabilities E) deciding on the resources and capabilities of allies

D) glocalization strategy that incorporates elements of both a globalized and a localized approach to strategy making.

82) Electronic Arts, like most companies that operate internationally, endeavors to employ as global a strategy as customer needs and market conditions permit via a A) profit sanctuary strategy in which a company derives substantial profits because of a strong or protected market position. B) pace of foreign country development strategy that enables it to overcome more than one factor on Michael E. Porter's Diamond of National Competitive Advantage. C) country-mapping strategy that is its strategy architecture for competing in two or more countries simultaneously. D) glocalization strategy that incorporates elements of both a globalized and a localized approach to strategy making. E) global strategy better able to focus its full resources on securing a sustainable low-cost or differentiation-based competitive advantage over both domestic rivals and global rivals.

B) whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.

83) When a company operates in the markets of two or more different countries, its foremost strategic decision is A) whether to test the waters with an export strategy before committing to some other competitive approach. B) whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries. C) whether to maintain a national (one-country) manufacturing base and export goods to the other countries. D) which foreign companies to team up with via strategic alliances or joint ventures. E) whether to use strategic alliances to help defeat its rivals.

B) has two big drawbacks: (1) it hinders transfer of a company's competencies and resources across country boundaries because the strategies in different host countries can be grounded in varying competencies and capabilities; and (2) it does not promote building a single, unified competitive advantage, especially one based on low cost.

84) A localized or multidomestic strategy A) is generally inferior to a global strategy when it comes to pursuing product differentiation. B) has two big drawbacks: (1) it hinders transfer of a company's competencies and resources across country boundaries because the strategies in different host countries can be grounded in varying competencies and capabilities; and (2) it does not promote building a single, unified competitive advantage, especially one based on low cost. C) is generally preferable to a global strategy in situations where buyers are price sensitive because a "think-local, act-local" type of multidomestic strategy is better suited to achieving low unit costs than a global strategy. D) is generally best suited for globally standardized industries, in which small country- by-country differences can be accommodated. E) involves much less adherence to using the same basic competitive strategy theme (low-cost, differentiation, best-cost, or focused) in all country markets.

B) The benefits from global integration and standardization are high.

85) Which statement is not a reason BP implemented a multidomestic competitive strategy to market its Castrol oil lubricants around the world? A) Buyers in different countries are attracted to different product attributes. B) The benefits from global integration and standardization are high. C) Industry conditions and competitive forces in each national market differ in important respects. D) The mix of competitors in each country market varies from country to country. E) Winning in one country market does not necessarily signal the ability to fare well in other countries.

B) Castrol produces over 3,000 different formulas of oil lubricants to meet the requirements of different climates, vehicle types and uses, and equipment applications that characterize different country markets.

86) Véronique is the CEO of a wind power energy company. Identify which company model she would emulate to craft a multidomestic strategy. A) Intel strongly encourages its trading partners to use the UN/EDIFACT ISO standard ISO 9735 for syntax and data exchange. B) Castrol produces over 3,000 different formulas of oil lubricants to meet the requirements of different climates, vehicle types and uses, and equipment applications that characterize different country markets. C) Tiffany & Co., an American luxury jewelry and specialty retailer, controls its general market approach from its headquarters in New York. D) Ford Motors establishes its own ride-sharing business in Mumbai, India. E) Vueling, a low-cost carrier based in Spain, adapts its price to competitive pressures from Norwegian Air, RyanAir, and EasyJet.

D) when the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited

87) When is it appropriate to use a think-local, act-local approach strategy? A) when the need for local responsiveness is minimal and when potential efficiency gains from standardization is unrestricted by cross-country opportunities B) when the local manager is intellectually savvy C) when the local market provides strong opportunity for growth and profitability D) when the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited E) when the need for centralized decision making is relevant due to various macroeconomic and market conditions

D) In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails.

88) Choose the statement that is not a reason a global strategy contrasts sharply with a multidomestic strategy. A) In global competition, rivals vie for worldwide market leadership. B) In globally competitive industries, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets. C) In global competition, a firm's overall competitive advantage (or disadvantage) grows out of its entire worldwide operations. D) In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails. E) In global competition, many of the same rival companies compete against each other in many different countries, but especially so in countries where sales volumes are large and where having a competitive presence is strategically important to building a strong global position in the industry.

E) in global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in each country market where it competes.

89) Despite their obvious benefits, think-local, act-local strategies have all of the following drawbacks except A) in global competition, rivals vie for worldwide market leadership and the leading competitors compete head-to-head in the markets of many different countries. B) in globally competitive industries, a company's competitive position in one country both affects and is affected by its position in other countries. C) in multidomestic competition, there is greater cross-country variation in market conditions and the nature of the competitive contest among rivals than tends to be the case in globally competitive markets. D) with multidomestic competition, the competitive contest is localized, with rivals battling for national market leadership; moreover, winning in one country market does not necessarily signal that a company has the ability to fare well in the markets of other countries. E) in global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in each country market where it competes.

E) selling directly to buyers (perhaps via the company's website) to avoid having to establish networks of wholesale/retail dealers in each country market.

90) The most unlikely element of a localized multidomestic strategy is A) granting country managers fairly wide strategy-making latitude. B) scattering plants across many host countries, each producing product versions for local area markets. C) adapting marketing and distribution to the buying habits, customs, and culture of each host country. D) considering the preference for local suppliers (use of some local suppliers may be mandated by host governments). E) selling directly to buyers (perhaps via the company's website) to avoid having to establish networks of wholesale/retail dealers in each country market.